Why the delay in enabling the €100,000 deposit guarantee?

On the 20th September, fully two months ago, the Government announced an increase in deposit protection limits from 90% up to €20,000 to 100% cover up to €100,000 saying : “Legislation will be introduced shortly by the Minister to implement the new guarantee level but this new level will have affect from today following the Government’s decision.” At this time government started to refer to a Deposit Protection Scheme which up until then was called the deposit guarantee scheme.

But the Minister has yet to order the increase. Why? As it currently stands the old limits still apply, yet the IFRSA consumer site talks of a limit of €100,000 and fudges the issue somewhat deflecting readers to the “Credit Institutions Financial Support Scheme” and not the “European Communities (Deposit Guarantee Schemes) Regulations, 1995” which covers all authorised banks but excludes credit unions. Yet the scheme is to be extended to cover credit unions.

The situation concerning banks is pretty clear cut – under regulations, a simple Ministerial order will amend the guarantee limit unless that is the “cost” of the additional cover has yet to be figured out.

The situation regarding credit unions is far from clear as primary legislation will be required amending both deposit guarantee and credit union laws.

Just when the intention to affect the new “guarantee” becomes a “guarantee” is unclear.

What? - ''the old limits still apply?'' everybody is saving under the assumption their savings are 100% guaranteed up to €100,000. Regarding credit union, I got my annual statement to-day and it states ''my savings have never been safer. (1)They are protected by the credit unions' own Savings Protection Scheme, (2) all savings and deposits are guaranteed by the government up to €100,000 per member.'' Is this incorrect? You have me worried now.

Well, the guarantee was changed from 100% of €100,000 to 100% of everything within a week, for specified financial institutions. See the Credit Institutions (Financial Support) Act 2008
http://www.oireachtas.ie/documents/bills28/acts/2008/a1808.pdf

the Credit Institutions (Financial Support) Scheme 2008
http://www.finance.gov.ie/documents/publications/statutoryinstruments/2008/si4112008.pdf

the Credit Institutions (Financial Support) (Specification of Institutions) Order 2008
http://www.finance.gov.ie/documents/publications/statutoryinstruments/2008/SI_4162006.pdf

the Credit Institutions (Financial Support) (Specification of Institutions) (No. 2) Order 2008
http://www.finance.gov.ie/documents/publications/statutoryinstruments/2008/si4252008.pdf

So the scheme is in place, but your cover may depend on who your deposits are with. Some other AAM bods may have more info?...

Nope the 100k isn't in place yet. Seems the DoF has prepared draft legilislation that has yet to be published for a revised improved deposit protection scheme including (a) 100k (b) no co-insurance ie 100% and (c) pricing mechanism to charge higher rates to less stable banks etc. See here: http://www.ecb.europa.eu/ecb/legal/pdf/en_con_2008_69_f_sign.pdf

Oldtimer:credit union savings are not guaranteed by the government, your credit union is wrong on this - they are to be guaranteed under the new form deposit protection scheme which is not the same thing.

Kaplan

Thanks, Kaplan, but I am still confused. What is the ''new form deposit protection scheme'' and how does it differ from the government guarantee scheme? I have just read the creditunion.ie website and it states '' the safety of deposits of up to €100,000 in all banks and credit unions operating in this country is still guaranteed by the Government.'' On another point, which guarantee does (or will) cover credit unions in Northern Ireland? Is the irish league of credit unions a 32 county organisation?

I've just been on to the customer helpline of the Financial Regulator and they assure me that the scheme is in place. Whats going on?